VTB Bank is rolling out a new way for airlines to pay for fuel via blockchain, according to a Monday (March 1) press release.
Users will be able to connect to the blockchain platform Smart Fuel and will be able to reduce transaction time. What initially took around four to five days can now be done in minutes, according to the release.
Gazpromneft-Aero, operator of Gazprom Neft’s aviation refueling business, runs Smart Fuel, according to the release.
Victoria Vanurina, senior vice president at VTB Bank and adviser to the first deputy president and chair of VTB Bank Management Board, said the project was “an excellent example of how a combination of industry, technology and financial expertise can benefit all the sides involved.”
“With its extensive experience in optimizing financial processes and introducing advanced technological solutions in the transaction services market, VTB has implemented a payment module that covers the settlement part between the fuel supplier and airlines slashing the payment transfer cycle to just a few seconds,” she said, according to the release. “Due to this blockchain solution, Gazprom Neft has optimized the system of mutual settlements with its customers. In the future, it will enable airlines to save money on advance payments.”
The process will let pilots refuel aircrafts simply by making a digital fuel request from a tablet. The bank will automatically put a hold on the required sum from the airline’s account until the process is complete. The new payment system will let airlines instantly pay for fuel directly through “fully secure financial transactions” any day and any time. This is an improvement over the previous method in which the parties for digital mutual settlements needed to make advance payments or apply for bank guarantees.
The airline industry has been heavily damaged by COVID-19, including business travel, which is expected to take a prolonged hit as companies move to cheaper Zoom calls and other such methods. Experts say there could be more of a boom in better conditioned, sectioned-off suite-style seating to help entice business travel to start back up.
